Real Estate Investing by AloysiusLouw1


									Real Estate Investing

There are many methods for building fortunes in the world today. One of the most
accessible even for the common entrepreneur however is real estate investing. In fact,
you will find many rags to riches stories are built by investing in the real estate marketing
in one form or another if not many methods for investing in this lucrative but risky field.

Real estate is a great strategy for the investor who is willing to make the time to learn
about the options, risks, and potential rewards for this type of investment process. Some
of the more common real estate investments are the following:

   1) Rental property. Property ordinarily gains value over time unlike many other
      investments that may rise and fall quickly and without warning. The problem is
      that far too few people can actually afford to hold and maintain multiple
      properties over an extended and indefinite period of time while waiting for the
      value to rise. Many property investors manage to overcome this by renting the
      properties to tenants during the time when the property values are rising. This
      allows the tenants to essentially cover the note on the property and makes the
      venture a little less risky though there are risks involved when dealing with
      tenants (such as property damage, failure to pay the rent, and possible legal
      woes—the good tenants generally outweigh the bad).
   2) Pre-construction investment. This is a highly speculative and very risky sort of
      property investment that has booms and busts. Many investors recently
      discovered exactly how risky this endeavor actually is when the property ‘bubble’
      went bust so to speak. The risks involved in this type of investment should not
      cover up the fact that many millionaires have been created through pre-
      construction investing and many more will be created in the future. Pre-
      construction investing, just as its name implies is a type of investment in which
      investors purchase ‘options’ on the property before ground is broken. This is very
      popular in high demand areas that are known to experience housing shortages as
      prices often rise quickly and the units are often sold before they are completed
      and any ‘real’ money exchanges hands.
   3) Flipping houses. This is a type of property investment that has made leaps and
      bounds in the last few years thanks to the popularity of many popular home
      improvement and house flipping shows on cable networks in the last few years.
      More and more people have decided to pursue this sort of investment in hopes of
      creating big profits in a short amount of time and with minimal investment. The
      problem, of course, is that it always looks much easier on television than it is in
      person. Couple this with the fact that many people have unrealistic expectations
      when it comes to costs and ability and there are plenty of risks involved with this
      type of investment as well. For those who are successful however, there is the
      potential for great profit in a relatively short amount of time as these televisions
      shows indicate.
   4) Buy and hold. As mentioned above, real estate tends to gain value over time.
      Even if the buildings are in desperate need of TLC and repair the very land they
      are standing on is more often than not gaining value as the years pass by.
      Purchasing large lots of land or even several houses and holding on to them for as
      long as possible before selling can often fund college educations for children, pay
      for weddings, or greatly supplement retirement funds. The longer these properties
      are held the better in most cases as this provides the greatest opportunity for the
      value of the property to increase.
   5) Lease options. There are few people in this world who never experience rough
      spots financially. Many of these people are denied traditional home loans because
      of their inability to cover debts properly in the past. For this reason they are often
      willing to pay for the privilege of rebuilding their credit while working towards a
      path of home ownership. For these people, a lease option presents a workable and
      often valued solution. Those investors who are willing to take the risks often find
      the rewards are well worth those risks.

These are only some of the investment opportunities that exist for those who are
interested in real estate for an investment avenue. There are commercial real estate
endeavors that have the potential to bring in big profits as well as the development and
planning of housing communities as well. Needless to say real estate investing offers
many opportunities to the savvy investor.



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